by Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd
I have previously written about estate agents who refer clients to “pet” solicitors and conveyancers in return for payment, and the corrupting effect this has on the industry. An equally insidious form of client referral is the “punishment referral”. This is where the estate agent refers clients away from a lawyer or conveyancer as a form of punishment.
Two separate but related incidents involving two Ray White Real Estate agencies drew my attention to the preparedness of estate agents to punish non-compliant lawyers and conveyancers by interfering in the lawyer/client relationship and referring the clients away to a “pet” conveyancer.
The first involved estate agent Sid Jackson of Ray White Real Estate Hornsby, New South Wales. The second involved Matthew Hurlston of Ray White Real Estate in Carnegie, Victoria. In each case my role as consumer advocate and legal representative of the clients put me on a collision course with the estate agent. In each case, the estate agent took the opportunity to “refer” a potential client away from me, and to a preferred conveyancer as a warning that they will not tolerate non-compliance.
Because my client-base is not confined to my local area I do not rely on estate agent referrals, so the behaviour of these two estate agents was not of any major concern to me or to my firm. However, most lawyers and conveyancers rely heavily on a local client-base for their survival, to the extent that some will even offer gifts and other incentives in order to ingratiate themselves with local estate agents.
Punishment, by way of referring clients to competitors, can devastate the business of a sole practising lawyer or conveyancer. Consequently such a punishment, or the threat of such a punishment, can severely affect the ability of a lawyer or conveyancer to properly represent their client, particularly where the conduct of the estate agent may be in question.
I have known contract-switchers to attempt to refer clients away when their conduct has been questioned, and in one extreme case I was told by an estate agent, “If we lose this sale because of you we’ll make sure that none of our purchasers ever go near you.“
The following examples highlight, not only the preparedness of estate agents to bully lawyers and conveyancers, but also the trivial matters that can trigger such bullying.